Post by epicfai on Mar 27, 2012 12:56:03 GMT -8
From the NYTimes: tinyurl.com/bm2wqlo
Frank E-Mails Reveal Negotiations at Art Gallery
By RANDY KENNEDY
Published: March 26, 2012
Of the adjectives often used to describe the art market — complex, unregulated and opaque — the last has always been truest. Glimpses into negotiations between high-end galleries and collectors are rare. But a lawsuit in state court in Manhattan is providing a view into the dealings of not just any gallery, but the world’s most successful one, owned by Larry Gagosian.
In January, Gagosian Gallery was sued by a prominent collector, Jan Cowles, 93, who claimed that Mr. Gagosian sold a 1964 Roy Lichtenstein painting, “Girl in Mirror,” from her collection without her consent. In new papers filed Monday, Mrs. Cowles’s lawyers — who accuse Mr. Gagosian of fraud, breach of fiduciary duty and unjust enrichment — reveal a series of sometimes frank deal-making e-mails that appear to show exactly how the painting was sold and how Mr. Gagosian made a $1 million commission on a $2 million sale.
In 2008 Mr. Gagosian visited Mrs. Cowles’s apartment in her absence with her son, Charles Cowles, a longtime art dealer, to see the Lichtenstein. Mr. Cowles was then in deepening financial trouble and discussing possible sales with Mr. Gagosian. In court papers the Gagosian Gallery has said that Mr. Cowles maintained dishonestly at the time that he had permission to sell his mother’s Lichtenstein painting. Mr. Gagosian took the painting on consignment, saying that he believed he could get $3 million for it and would take a $500,000 commission. (Another version of the painting had sold at Sotheby’s in 2007 for slightly more than $4 million.)
But by 2009, according to the e-mails, the gallery had offered the painting for considerably less to a collector, Thompson Dean, a managing partner of a private equity firm, telling Mr. Dean that he had an opportunity to get an incredible bargain. “Seller now in terrible straits and needs cash,” said a July e-mail to Mr. Dean from a Gagosian staff member. “Are you interested in making a cruel and offensive offer? Come on, want to try?”
Mr. Dean apparently did and agreed to buy the painting for $2 million. Mr. Gagosian took a $1 million commission — an unusually high percentage for a secondary-market sale. In its papers the Gagosian Gallery said the higher commission was part of a “package deal” that involved another painting, the sale of which generated an earlier lawsuit that Mr. Gagosian settled for $4.4 million last year.
According to Mrs. Cowles’s suit, the gallery told Mr. Cowles that it had been able to make only $1 million for him on the Lichtenstein painting because it was damaged, an account he accepted. It did not tell him about the negotiations with Mr. Dean or the sale price, according to the papers. (Whether the painting was indeed damaged remains in dispute; Gagosian Gallery maintains that it was but has not clearly specified the damage in its court papers.)
Mrs. Cowles, who has suffered from dementia for several years and whose business is being conducted by her lawyers, is seeking $10 million in punitive damages.
Gagosian Gallery, which has sought to have the suit dismissed, said Monday that it could not comment on pending litigation. When the lawsuit was first filed, the gallery called the charges “outrageous and baseless.”
David Baum, who represents Mrs. Cowles in the case, said: “The e-mails speak for themselves. Gagosian’s behavior was deplorable.”
Frank E-Mails Reveal Negotiations at Art Gallery
By RANDY KENNEDY
Published: March 26, 2012
Of the adjectives often used to describe the art market — complex, unregulated and opaque — the last has always been truest. Glimpses into negotiations between high-end galleries and collectors are rare. But a lawsuit in state court in Manhattan is providing a view into the dealings of not just any gallery, but the world’s most successful one, owned by Larry Gagosian.
In January, Gagosian Gallery was sued by a prominent collector, Jan Cowles, 93, who claimed that Mr. Gagosian sold a 1964 Roy Lichtenstein painting, “Girl in Mirror,” from her collection without her consent. In new papers filed Monday, Mrs. Cowles’s lawyers — who accuse Mr. Gagosian of fraud, breach of fiduciary duty and unjust enrichment — reveal a series of sometimes frank deal-making e-mails that appear to show exactly how the painting was sold and how Mr. Gagosian made a $1 million commission on a $2 million sale.
In 2008 Mr. Gagosian visited Mrs. Cowles’s apartment in her absence with her son, Charles Cowles, a longtime art dealer, to see the Lichtenstein. Mr. Cowles was then in deepening financial trouble and discussing possible sales with Mr. Gagosian. In court papers the Gagosian Gallery has said that Mr. Cowles maintained dishonestly at the time that he had permission to sell his mother’s Lichtenstein painting. Mr. Gagosian took the painting on consignment, saying that he believed he could get $3 million for it and would take a $500,000 commission. (Another version of the painting had sold at Sotheby’s in 2007 for slightly more than $4 million.)
But by 2009, according to the e-mails, the gallery had offered the painting for considerably less to a collector, Thompson Dean, a managing partner of a private equity firm, telling Mr. Dean that he had an opportunity to get an incredible bargain. “Seller now in terrible straits and needs cash,” said a July e-mail to Mr. Dean from a Gagosian staff member. “Are you interested in making a cruel and offensive offer? Come on, want to try?”
Mr. Dean apparently did and agreed to buy the painting for $2 million. Mr. Gagosian took a $1 million commission — an unusually high percentage for a secondary-market sale. In its papers the Gagosian Gallery said the higher commission was part of a “package deal” that involved another painting, the sale of which generated an earlier lawsuit that Mr. Gagosian settled for $4.4 million last year.
According to Mrs. Cowles’s suit, the gallery told Mr. Cowles that it had been able to make only $1 million for him on the Lichtenstein painting because it was damaged, an account he accepted. It did not tell him about the negotiations with Mr. Dean or the sale price, according to the papers. (Whether the painting was indeed damaged remains in dispute; Gagosian Gallery maintains that it was but has not clearly specified the damage in its court papers.)
Mrs. Cowles, who has suffered from dementia for several years and whose business is being conducted by her lawyers, is seeking $10 million in punitive damages.
Gagosian Gallery, which has sought to have the suit dismissed, said Monday that it could not comment on pending litigation. When the lawsuit was first filed, the gallery called the charges “outrageous and baseless.”
David Baum, who represents Mrs. Cowles in the case, said: “The e-mails speak for themselves. Gagosian’s behavior was deplorable.”
